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Special Needs Trust is designed to protect the financial future and care of your loved ones. This will allow them to be provided for in the way that you hope by parking and sheltering their assets in a protected vehicle which allows them to keep both their government benefits and there assets.

Why do we use a Special Needs Trust?
A Special Needs Trust will protect your disabled child’s Supplemental Social Security and Medicaid benefits; vocational housing; subsidized housing; gift money; protect against divorce, lawsuit and judgments, bankruptcy or contested wills of the parents and more. The Special Needs Trust will insulate your child finances while having money to provide for services that SSI, Medicaid and other government benefits don’t cover.

When should you start a Special Needs Trust?
As soon as you know your child is disabled you will want to start the trust so that you never have any issue with Medicaid and Supplemental Social Security for the 36 to 60 month look back period or the asset limit of $2,000 in a given year.

Why would I have multiple trusts for my disabled child?
If for example your child funded a trust from their own money or award of damages, that would be a First Party Trust and would be subject to Medicaid repayment requirements while a Third Party Trust which is funded by family members and/or friends would not be subject to Medicaid repayment, so should require separate trusts. There are occasions where it is better to have separate trusts in order to protect the assets better.

Should the parents be the Trustee over my disabled child’s trust?
Although a parent could be a Trustee, often it is better they be a Co-Trustee as the Trustee’s job is not to just provide money when required, but rather to use that money as is required by the terms of the Trust. The Trustee cannot violate the terms of the trust as to cause tax penalty or loss of benefits. The Trustee must know how to budget, invest, keep accounting of the funds and most importantly follow the trust terms and therefore often the Trustee will be a professional attorney, financial planner, accountant, etc while the parent remains the Co-Trustee.

What types of property can be held in a Special Needs Trust?
Almost anything can be held in a Special Needs Trust such as real estate, vehicles, stocks, jewelry, artwork, but mostly cash which can be in the form of inheritances (which should be left to the Trust directly NOT to the child directly), lawsuit damages, gifts, etc.

How are the assets of the Special Needs Trust used?
Since the primary purpose of Special Needs trusts are to enhance the quality of life for the beneficiary, the trust can be used to fund such things, including but not limited to, therapy and caregiving; travel; concerts; services such as cell phone, internet, cleaning; pet care; computer; education; etc

Can a Special Needs Trust buy a home or rent an apartment?
Yes, but there are regulations affecting the trust for shelter and the house may be subject to the payback provision of Medicaid if the funds were originally derived from a First Party Trust.

What is a “payback” provision?
A “payback” provision may be required only if the funds used to establish the trust are those of the beneficiary, such as personal injury settlements.

Can a Special Needs Trust buy a car?
Yes, but insurance can often be very difficult to obtain therefore it is often advantageous for the trust to lease a car.

Can a Special Needs Trust distribute cash to the disabled child?
Yes, but any cash distributed to a trust beneficiary, after the first $20.00 per month, will reduce the SSI payment dollar for dollar. If the SSI payment is completely eliminated, Medicaid will be lost.

Can a Special Needs Trust give gifts to persons other than the disabled child?
No, the Federal and State laws require the trust be for the “sole benefit” of the person with a disability.

Are there any negative affects to me for creating a Special Needs Trust?
• Depending on your use of the trust, there could be excessive fees in administering a Special Needs Trust, so you want to use professionals that you trust.
• The Trustee has discretion over the use of the funds therefore the beneficiary has some lack of independence, so you want Trustees who you trust.

We are sure you have lots more questions, contact us today to schedule a free consultation to discuss all of your concerns